Despite a lot of new trading strategies that have been invented in the forex trading world, swing trading is still have many users that implement it on regular basis to gain steady winning trades day after day; but apparently, this strategy is less popular among novice traders who aim for quick profits.

By definition, swing trading is buying or selling currencies near the end of an up or down price swing that caused by price volatility for a period. This position can last for a couple of days or just one day; depend on the market movement and the targeted profits.

With this method, there are a few important things to consider:
1. Support and Resistance
Don’t depend just on one chart to decide support and resistance level, instead, check a few different charts to make sure that you’ve had it right.

2. Using the Data
Even between swing traders, there are many methods used to define entry and exit point; these are some of them:

• Wait for the currency to turn away from support or resistance, define it as price momentum, and execute the trade.
• Identify a certain pivot point in the chart, mark it as “pivot line”, then if the price manage to break the line, execute buy/sell based on whether it is an uptrend or downtrend.
• Using Fibonacci extension tool or just look for nearby pivot point to look exit point from the market.

3. Indicators and their Functions

• Stochastic and RSI (Relative Strength Index) to identify momentum.
• Fibonacci, pivot points, and fractal measurements to identify entry point.
• MACD (Moving Average Converge Divergence) as additional tool for confirmation.

4. Taking Profit
How much profit to aim should be adjusted with the current market condition. If the market is trending or volatile, you need to get in, grab as much as you can get (within safe period), and get out quickly. This is important since as the market keeps moving, there is high chance that you’ll get a reversal.

On the other hand, if you’re executing your trade when the market is not really going anywhere, you can aim for longer term swing trade, such as 3-4 days. With this strategy, you can expect higher profit; just remember to put your stop loss and take profit accordingly.

Many novice traders choose short term strategies because they want easy and fast profits, but here’s the hard fact: it is really difficult to make numerous small trades and keep maintain good winning rate. Instead, if you’re just started trading forex, you should go with swing trading since it offer simple analysis and relatively safe way to earn steady profits.

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Get A Free Forex Trading Account. In the following discussion we will provide some forex currency trading tips to help you become a more successful trader. These tips are not only meant for newbie traders – experienced traders should also benefit from them. It’s after all never possible to know everything about the forex trading market. The first and most important tip is that you should learn to control your emotions.

A trade should never be entered into because you have a ‘gut feel’ it’s going to work. It should also never be exited or clung to because of fear or greed. This is why you should have a written trading plan and stick to the rules of that plan whatever you feel is going to happen. Secondly, remember that knowledge is power. You can never have enough knowledge about the forex market and the factors influencing it. Keep on reading, talk to other traders, join discussion forums and study the blogs of successful traders. A stop loss that is too tight is probably one of the biggest reasons novice traders lose money. If you don’t allow the market time to ‘breathe’, to go about its normal ups and downs before going into a certain direction, you will keep on making small losses. A stop loss is important, but be realistic and set it wide enough. More forex currency trading tips: A mistake many traders, even experienced ones, often make is to overtrade. If you have too many trades open at the same time, you can’t concentrate properly on all of them.

Making too many trades in a single day will most of the time result in numerous small losses or even smaller profits, and you will miss all the big action. Margin trading enables the forex trader to trade in much larger amounts than what he actually has in his trading account. This is a double-edged sword, however. A 1% movement in the right direction could double your trading funds. A 1% movement against you could wipe out your account. This is why a novice trader should gradually increase his leverage over time, don’t start off with high margin trading. A final word of warning: rather don’t trade when the forex market is quiet. This is not when things are happening. As a non-institutional trader, you will much more likely make money when the market really gets going after about 10h00 CET. Watch out for price breakouts – this way you can catch the big moves with which you will make serious money. We can provide thousands of other forex currency trading tips, but these ones highlight some of the most common pitfalls and opportunities the market presents.

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Day traders look to use hourly charts within the day so they can trade with limited risk and get out with a profit.

When doing this they use a variety of technical indicators such as pivot points to help them.

Let’s see how intra day charts can be used to help make profits in forex day trading.

The answer is you cannot make profits consistently trading using intra day charts!

This is obvious to most people except day traders.

The Proof

The reason is obvious, but many novice traders fall for the hyped sales copy of vendors selling these forex day trading systems.

However, if you ask them for their real time track record you won’t get one.

Of course, you will get a hypothetical track record done in hindsight.

These show wonderful profits, but as the track record has been constructed in hindsight knowing the closing prices it’s not exactly hard to make money!

If I knew tomorrow’s closing price today I would be a multi millionaire but of course forex trading is not like that.

The reason why intra day charts are useless and day trading logic is flawed:

1. Consider this everyday trillions of dollars are traded by countless millions of traders all with different investment objectives and styles.

To think that this mass can be predicted in the time period of a few hours is laughable.

2. Most of these traders pay no attention to day or intra day levels the only people who do are day traders and their a tiny losing majority.

As these levels are not considered important, volatility can and does take prices anywhere.

3. It’s a fact that volatility within in any day is random.

It doesn’t matter what indicators you use, day traders are working with meaningless data.

4. Day traders who use intra day charts think that they can restrict risk, but of course they actually create it.

Their stop levels get triggered the majority of the time, as volatility stops them out.

When their lucky enough to get a winner, they don’t run the position and are grateful to get out with any profit they can.

So not only do day traders use meaningless data, they also break the fundamental rule of investing:

Cut your losses and run your profits to cover them.

Day traders to be fair do keep losses small ( and they have a lot of them ) but of course they can’t run profits to cover them.

What is the end result?

A wipe out of account equity.

If you want to lose your money quickly, their really is no better way then trading with intra day charts.

So why do so many people fall for day trading systems?

They tend to be greedy investors who think forex trading is easy, or novice traders who don’t know any better.

Day trading systems are sold by vendors who rely on attractive sales copy.

They tend to fall into two groups failed brokers or marketing people who have never traded.

Of course their not stupid enough to trade the systems they sell themselves – That’s why you never get a real time track record

They simply make money from selling the system and leave buyers to lose money.

They win, day traders lose, it really is that simple.

Day trading is popular with huge numbers of novice traders yet you are guaranteed to lose in the longer term, as the logic it is based upon is simply not true and can never work.

Lets look at the two reasons why if you day trade you will lose.

Before we get started on the reasons why day trading is a guaranteed route to losses lets look at why you see track records with huge profits on many day forex day trading systems.

Here is the reason they all carry a disclaimer like the one below which means they have NEVER been traded:

“CFTC RULE 4.41 – Hypothetical or simulated performance results have certain limitations. Unlike an actual performance record, simulated results do not represent actual trading. Also, since the trades have not been executed, the results may have under-or-over compensated for the impact, if any, of certain market factors, such as lack of liquidity. Simulated trading programs in general are also subject to the fact that they are designed with the benefit of hindsight. No representation is being made that any account will or is likely to achieve profit or losses similar to those shown”.

So you can make anything up you like and the track record is not worth the paper it’s written on.

What’s the point in having a track record if it isn’t real and also you would think that the person selling the system would actually show confidence and trade it!

The reason they don’t is most are sold by marketing companies looking to dupe naïve and greedy investors. Try and find a forex day trader with a real time track record and let me know if you find one you won’t

So why doesn’t day trading work?

The reason is obvious all volatility in short time frames is of a random nature and all support and resistance levels are not valid.

You cannot get the odds in your favor when day trading and if you can’t get the odds in your favor you will lose – Period.

You simply can’t judge in such a short time span what prices will do.

You have millions of people all with different motivations and personalities and to say you can measure what this vast diverse group will do in under a day is simply destined to failure.

So the next time you see that tempting day trading track record check the small profit, as chances are its never been traded. Then think about the above and you will see that day trading is a total mugs game.

Stock trading has become a serious business where every investor or trader wants to invest and make money. Of course stock market trading offers huge potential to make instant money and this is the reason more and more investors are heading towards stocks leaving other financial instruments behind. Another reason for this tremendous popularity of stock investing and trading is availability of online trading services. With such services, investors and traders could trade in the stocks easily from anywhere in the world. Stock trading could almost be done whole day and such opportunities are made possible from the online trading services.

Only few year ago, small investors or traders could only dream of entering into trading. This was considered the most serious business and complex process which required traders to pay full dedication and concentrate on latest happenings in the stock markets. In short, this was only possible when a trader had no other business or job to perform. But the scenario has changed completely. Online trading services had made it possible for day traders to access their trading account from anywhere and trade quickly. Now, there are no more hassles for you to be present on the floor.

Online trading services are very interesting. Even novice traders are trying their hands on this with such services. However, this is a serious game and of course, experience is always an added advantage. There are a lot of stock trading brokerage firms that serve investors online. Such firms provide effective online trading platform for exceptional day trading. The main advantage of subscribing to this trading services is that you can easily access trading account at any point of time. Moreover, such services also give you free or paid access to essential trading tools for this type of trading.

Unlike traditional brokerage firms, online brokerage companies offer discount brokerage to investors and traders, helping them maximize their earning potential. Such firms not only provide you online day trading platform but also assistance of stock brokers. So, even if you are unaware of how day trading works, you can still make money with day trading. Another benefit of getting online day trading services is that your trade orders could be executed instantly and you are ensured that you won’t be missing any money making opportunity.

Whilst traditional day traders have to keep a constant watch on different sources (business news channels, etc.) to get latest stock quotes, online day traders sit back on their trading tables and access real time stock streaming quotes provided to them on the brokerage website or trading platform. Several online brokerage firms also provide latest stock news, trading tips, stock trends, stock analysis, stock charts, screeners etc.

Despite the fact that trading services offer handsome opportunities to traders, it could be a costly affair if you do not hire a professional discount day trading brokerage firm. It is always advised to research well before hiring any online day trading service. Also, novice traders must take help of professional brokers to make money while trading. It would be beneficial, if a novice undertake trading courses available online / offline. Security is always a continued threat when it comes to online trading. Therefore, you must ensure that the security measures taken by your online brokerage firm are appropriate.

Below are some quick tips, beginners must follow for effective online day trading –
1)Do not overtrade -it is very important for novice day traders not to overtrade. Trading should always be done after undertaking technical and fundamental analysis of each individual stock. Also, day trading should be controlled and free from emotions.

2)Spread the risk – generally day traders have a tendency to pull all their money in a single stock. This could be dangerous. You must spread the risk by investing your money in different stocks and also make sure that you trade less but consistent.

3)Practice accounts – some online trading services or brokerage firms also offer free practice trading account. You must take advantage of such account. It allows you learn how day trading works and helps you get friendly with the online trading platform provided to you by the online brokerage firm.

Author: Micheal James
Article Source: EzineArticles.com
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